Wednesday, December 30, 2009

Freaking Out The Neighbors

Ever since my new neighbor moved in four years ago he has caused quite a spectacle. Most other neighbors in this small densely wooded enclave on the edge of corn and bean fields are professionals who belong to the local country club, golf, run 5k’s and marathons and attend black-tie fund raising charity galas. My lifestyle doesn’t quite fit in and neither does that of my new friend next door. We both get along great and have mutual respect.

Friend and neighbor is a serious deer hunter. He has access to very productive land just ten minutes away (owned by a friend of his who is a very wealthy retired industrialist) and usually bags five deer each season. Yesterday he poked a monster buck with his crossbow as this season is drawing to a close. Twelve points, typical rack and should score well on the Boone & Crocket scale due to the thickness and length of the tines. It weighed 198 lbs. dressed. Not a record by a long shot but a trophy just about anywhere whitetailed deer romp. He called and asked if I would come over to take photos of him and his trophy

Since he moved in he is not shy about opening the back of his truck to wash out blood as it rolls down the driveway out of the open carcass. He then drags his quarry into the garage to be hoisted on a gambrel attached to a strong block & tackle pulley hoisting it up for skinning and butchering.

I have helped him skin and butcher deer before. My reward is a few roasts, chops and chili meat. Yum.

Out here in the country a sight such as this is common but not in our small enclave of upscale floot-snoots. Think Margaret Drysdale watching the Clampetts.

I have heard second-hand comments about friend and neighbor from others because of his actions. The term “redneck” comes up often. To me, redneck used in that context is a compliment. This 70+ year old fellow could probably buy and sell most of them. Call him excentric.

Yesterday afternoon I noticed one neighbor close the curtains. Another pulled out of his driveway and turned his head away as he passed.

As a hunter I am not looked at in that same way. I hunt birds and waterfowl. He hunts sweet little ol’ Bambi and her dad. They will confide in me their displeasure of his actions not knowing that if I had access to productive land I would be doing the same thing. Cleaning my small game is a bit more on the discreet side.

If they only knew.

Tuesday, December 29, 2009

The High Cost Of Corporate Hospitality

Last Thanksgiving my brother-in-law Steve informed me that his company had seats available for last night’s Monday Night Football game between the Vikings and the Bears and nobody wanted them. He asked if we wanted to go. Of course the answer was an immediate YES.

The company owns four exclusive PSL seats and four regular season seat passes. They also own a penthouse condo on south Michigan Avenue where we could tailgate (or should I say skygate) before the game. We went to a game with him last year and no way would I turn down the invite for such a unique experience again.

We all know the Bears suckitude has reached their mid-seventies level but it matters not to me. I go to games for the experience of watching live NFL football, as always.

Dan had asked that I provide a full account of my experience since these PSL seats included entry to an exclusive area called the Cadillac Club, sponsored by the Bears corporate sponsor, the Cadillac division of Government Motors. I do not have photo documentation because as it turned out, I did not sit in the PSL seats. His company also owns four regular non-PSL seats close to where Dan and Carl sit in the northwest corner. Two of us surrendered our option to the PSL seats to provide comfort for the women who came along, my wife included.

Chivalry prompted us to sit outside in order to provide our ladies with access to the warmth and comfort of the The Cadillac Club should they need it. Instead, we sat in full winter insulated hunting regalia in the regular seats. Kind of like waiting to shoot a trophy buck in a frigid tree stand while the women stayed in the cabin.

We made plans to swap time in the PSL seats but with the security involved that became impossible.

The PSL folks spent more time in their seats than they did in the C.C. To be honest, sitting in the stadium in 9 degree temperature is not bad at all as long as you prepare and dress appropriately as we all did.

Here’s how they described their C.C. experience.

The Cadillac Club is nothing more than a large corner sports bar located within the newly renovated Soldier Field stadium. Inside there are TV’s with the game playing along with Miller Lite neon, Bears mementos, waitresses and wings. The food is better quality than what is served to the minions in the stadium. The Miller Lite is still $7.50 for a 16 oz. plastic cup. Instead of providing a window where they could view the field and watch the game live like a big skybox the C.C. is completely enclosed.

It’s a nice place warm up when the weather is 9 degrees as it was last night. Their outdoor stadium seats were on the forty directly below the sky boxes on the east side. These are prime seats for the corporates who don’t want to shell out $100,000 for a corporate skybox.

Above is a ticket to the PSL/C.C. seat.

The cost of the seat. $ 96.43
Taxes $ 11.57

Total $305.00

Before I dissect the ticket costs Steve told me the original cost for the four PSL rights was a total of $10,000 four years ago for the four. This was a way to help finance construction of a new stadium. They were not $10,000 each as I had heard. The concept was to sell the rights to the seats at a later date for more money, it was an investment. As with any investment, supply must outweigh the demand for the investment to grow. Buy low sell high. The product must surpass expectations. In this case the hedge fund manager is Lovie Smith. Not good.

The cost of the game day PSL ticket is not bad considering the vantage point they provide. I assume that game day seat ticket fee goes to the McCaskey bank account in order to help finance their enterprise (I am being kind, don’t get me started). The taxes probably go to Dick Daily’s crew for the privelige to attend the game in a Chicago Park District owned stadium. But for the life of me I cannot account for the $197 cover charge to a sports bar where they charge $7.50 for a warm, flat beer. The drinks and munchies should be free considering the pricey cover charge. Haven’t they heard of “happy hour”? Maybe Dick Daily and the McCaskeys split that windfall somehow.

Steve explained to me that the company is planning to sell all the seats. This season they have not been able to entice clients with the opportunity to watch bad Bear football. In the future they would prefer to purchase individual game day seats from a reseller or ticket broker for client entertainment. That sounds less expensive and makes smart business sense in an economic downturn.

What this all comes down to is the perceived price of corporate hospitality. Businesses pay dearly for the opportunity to spend quality time with their clients and business partners. It is also known as putting on “The Schmooze”. This is how business is conducted. It could be a thank-you for doing business or a way to build a relationship with a potential customer. It could be time on an exclusive golf course or time at an MLB, NBA or motorsports event. It provides the businessman with an excuse to relax with time-poor customers/clients they may not have a lot in common with other than business and interest in a professional sporting activity. It’s actually a small price to pay for business relationships. In the mid-seventies this is how I was able to attend sold-out Bear games even when the Bears were as sucky as they were this season. In my case I was the customer back then and my vendors were printing salesman or art and photography studio owners.

The high cost of corporate hospitality has made it so the average working stiff must pay a high price to attend an event. Throw in the cost of muti-million dollar player compensation and so it goes.

This is in no way an attempt to smite corporate hospitality or in any way disrespect Steve’s generous offer. We had a ball. We had a penthouse “skygate” with grilled burgers, brats, snacks, and top-shelf cocktails in a warm place offering a spectacular view overlooking Grant Park to the north and Lake Michigan to the east. It was a short walk to a game where the poorly coached Bears beat the Brent Farve playoff-bound Vikings in overtime. An overtime where Farve threw the interception turnover and Cutler tossed a clutch winning touchdown pass. Talk about turnabout being fair play. It was (and I do not use his term loosely) awesome.

There was a fantastic halftime fireworks show. The stadium was packed, even on such a frigid night to watch a crappy team. Lots of Vikings jerseys and if memory serves me correctly all Viking games I attended in the past drew a lot of purple. The majority stayed until the overtime win was secured, myself included.

When the game was over Steve offered us one of the four penthouse bedrooms so we did not need to drive home after midnight. Thank you so much, Steve. If for some reason the seats remain with the company next season we would be thrilled to do it all over again.

Nothing says “Living The Good Life In The Great Midwest” than an experience like that.

Here are some photos I took of the 30th floor company condo this morning. I had no tripod, the light was thin and some images turned out blurry. Sorry, I should have known better.

Go Bears. Fire Lovie. Start over. See you next year.

Monday, December 28, 2009


Long, rambling personal post about my running ahead. If you don't care, just skip it. I won't be mad.

For Christmas, my wife got me a pretty interesting book about running called Born to Run, A Hidden Tribe, Superathletes, and the Greatest Race the World Has Ever Seen. Book titles seem to get longer and longer it seems.

The book is about a lot of things.
  • The science of running
  • How we run
  • Why we run
  • Where we came from in regard to running
  • Ultramarathoners (50 miles or more at one crack and sometimes 100)
  • A lost tribe of runners found in the sticks of Mexico

This book was very interesting to a relatively novice runner like myself. There was a lot of great information in it and the story was compelling to boot. I don't want to spoil a lot of it for you but if you are interested in running, I highly recommend it. It is only 300 pages or so and will provide a runner with a lot of interesting insights. The book also got me to thinking about my own running. Below is a video I took just a few days ago of me after I am warmed up. This is about an 8 minute mile pace, which is pretty standard for me anymore when I run distances of 5 miles or greater.

The main reason I took the video is because I want to analyze my stride. While I gleaned some useful info from the video, I will have to take another one, from lower down. What I am trying to do is to see how much wasted energy I have in my stride from "paddling" or moving my legs side to side, instead of from front to back.

From the video a couple of things stuck out at me right away. It is very apparent that my ankle and shin are not straight when they hit the ground. I am not sure if this is good or bad, but it is something I noticed. The other thing that I was totally shocked at was the condition of my calves. My god they are absolutely ripped. I guess I don't look at my backside too much, but I assume my thighs are the same way - it is hard to tell from the video. I guess a benefit from running so much.

I gleaned a few other things from the video, but frankly don't know what to do with the information. Last week I did five miles on the dreadmill in just under 38 minutes, a new personal best for me. I can probably squeeze a few more seconds out of my times if I quit bodybuilding so much with strength circuits but I don't really want to stop that. And I really don't want to quit MT.

I actually thought about quitting MT for a while because I wanted to take my body to places that I never thought it could go. I wanted to start getting competitive with my running and biking. At the level I am at, I will always be a good runner and biker, but not competitive - to me, competitive is to finish in the top 10% of my age group. If I quit MT and the strength circuits and gave all that time to biking and running, I know I could be an elite runner, biker, and duathlete. But that won't do. I like the strength circuits and MT too much. Plus, doing all of this different activity does not allow your body to atrophy into a certain shape - it never knows which workout is next so you stay a better all around athlete. Jack of all trades, master of none.

BUT, I can improve my running and biking, of this I am positive. I have decided to make an appointment with my masseuse, who is also an elite triathlete. She also coaches triathletes and has her own team. I think that with just a few lessons from her I can shave a good half minute off of my per mile time and certainly a good chunk off of my biking times. On top of this I just got a new bike that will be at least 35% lighter than my old one, so that will help immensely.

Last year I ran more miles than I ever thought I could and this year I plan on doing the same, only in a different way. The half marathons I ran were fun and interesting, but I think my favorite distance is 10k. I can blast that distance very easily (only 6.2 miles) and I think I can get to within the top 25% of my age group with my current training schedule. The anearobic training I receive from MT helps in this regard.

I still haven't sat down and chosen my events for next year, except for the New Years Day Dash (5 miles) and the Shamrock Shuffle (10k). As an aside, I was on the side of town where the New Years Day Dash is and the roads and trails there are a miserable mess. I am not expecting a lot out of my time in that one.

I think this next long weekend I need to sit down with the calendar and pick and choose my spots. I did a LOT of events last year and need to pare that down a bit. Carl has also mentioned he still wants to do a "destination" run in the spring when we are all sick of the cold so I need to keep that in mind.

Good things to have to sort out if I don't say so myself.

Sunday, December 27, 2009

Neat Bar Trick

Recently I was out with new blog member Andrew from Aurora having a beer over at Elephant and Castle (funny, from playing combat mission for years with Dan I always spell it "Elefant" like the German WW2 tank destroyer - Dan check out the link they restored the one at Aberdeen since we were there) and I first bought a miller lite but it was so flat I traded up to a Stella Artois. Then I noticed the bartender doing a trick I hadn't seen before.

He took the Stella that had been sitting on the bar waiting for him to pick it up and deliver it to a table and stirred it with a little straw like I am doing in the photo to put some head on the beer. Ha! A pretty good little trick to make it look fresh out of the tap.

Saturday, December 26, 2009

Tax Cuts - Even the NY Times Starts to Get It

As a "solution" to our economic problems, the government has been spending money on stimulus programs. Since the government can't directly incent business development, this type of money ends up going to 1) minor infrastructure projects and 2) funds for local governments and states to spend on salaries, programs.

As we know, the government has to raise revenues to pay for these programs in the form of taxes. Then the taxes, which distort business activities in myriad ways, are paid out in the form of salaries and grants in a relatively inefficient manner through a variety of poorly managed government programs.

While it isn't popularly known, the US has among the highest corporate tax rates in the developed world and it isn't just a co-incidence that other venues such as Hong Kong and Brazil are seeing an upsurge in IPO's and stock listings. The US today is not a competitive place to start a business, all else being equal.

The current government is not only taxing the US at an unsustainable rate as far as competitiveness, it is spending money that it doesn't have (deficit spending), which will burden the US and future generations with high interest payments. The current deficit for 2009 is estimated to be about $1.6 trillion dollars, which will add about $100 billion / year in interest payments (fluctuates depending on rates).

All of these taxes don't help put people in meaningful (non-government) jobs. In fact, they hurt our competitiveness and hurt the businesses most likely to grow and create jobs. Since unemployment is important even to our elected officials (unlike debt, competitiveness and future interest burdens, apparently) because an unemployed electorate is an angry electorate, institutions like the NY Times have to start thinking about tax cuts as a way to spur job creation.

From the article, titled "Tax Cuts Might Accomplish What Spending Hasn't",
When devising its fiscal package, the administration relied on conventional ideas based in part on ideas of John Maynard Keynes. Keynesian theory says that government spending is more potent than tax policy for jump-starting a stalled economy.

(Per the administration) it says that an extra dollar of government spending raises GDP by $1.57, while a dollar of tax cuts raises GDP by only 99 cents.

According to the Romers (on the President's Council of Economic Advisors), each dollar of tax cuts has historically raised GDP by about $3 - three times the figure used in the administrations' report. That is also far greater than most estimates of the effects of government spending.

While pretty much anyone reading this blog could have told you that tax cuts would have been a more effective way to stimulate the economy, it is striking that even the administrations' own advisers are waking up to this obvious fact.

Too little, too late, for everyone that will be paying for this mess in the future and unwinding the piles of ineffective government staff and programs that these dollars create, but still a glimmer of insight for that crew, at least.

Cross posted at Chicago Boyz

Friday, December 25, 2009

Merry Christmas

Merry Christmas from Carl up here in the sky condo. Curling up with some of the books I received for Christmas and a quality drink in the matching goblet thoughtfully provided by Dan.

Also here is a photo of the most practical gift I received - a new battery for the ol' Altima. Better safe than sorry and waiting until it's out of juice in the middle of nowhere.

Thursday, December 24, 2009

A Bloody Mary Christmas!


From the home office here at the Valpo country bunker to all of you out there on the internets, we wish you the very best life has to offer.


Merry Christmas.

Milestone and Merry Christmas

As I was getting ready to put my traditional "Merry Christmas" post I noticed that Andrew's Glock trigger job post is our three thousandth here at LITGM. So thanks to our authors and to our readers for taking part in this massive project. Not a lot of blogs can say that they have that many posts of SUBSTANCE, that are actual thoughts rather than just a link or quote or whatever. I would be interested to know how many words have been put up here, there is probably a program somewhere that can tell me that. As a guess I would say it is in the millions.

Anyway, I hope that all of you get what you want for Christmas, I know I did (more on that later). For now, Merry Christmas to all of you! I stole this video from Annie's place, maybe you will get the gift that keeps on giving for Christmas - a gun. This guy has my favorite gun of all time at 2.11, the Russian WW2 vintage PPsH 41.

Monday, December 21, 2009

Moving Outside of My Art

Everyone who reads here knows that I am involved in Muay Thai. For the year end, the head instructor at our gym did a seminar. The first part was teaching sparring techniques for Muay Thai. The second part was Brazilian Jiu Jitsu. The last part taught some self defense for the street, and it was JKD based.

These are the three arts that are taught at my gym. I only have time to practice Muay Thai.

Trying something different was quite a revelation. Honestly, I didn't like the BJJ. I do have a new respect for the guys and girls who practice it. As with any of the martial arts, there is a ton of technique involved. Having never rolled before I knew nothing of what was going on. The guy who I was partnered with was super though and helped me through the moves.

The JKD stuff we did was cool. With that art you are never trying to score on an opponent like in MT. All of the strikes and holds are for destruction. We did a couple of small flows and practiced some street situations.

During the JKD I was partnered up with one of the instructors. During a certain move I discovered something really amazing. I am completely hard wired for Muay Thai. During part of the JKD flow, my opponent threw a jab at me. I instinctively used my right hand to parry that jab down and made a quick step in with an overhand elbow. I apologized to the guy I was with who quickly told me that there was nothing wrong with what I just did. It was all a result of my years of being hard wired to MT. I have to admit after I did the move I was pretty blown away. I literally didn't even know I was doing it, I just did it.

After doing this seminar, my original observations about MT as far as self defense are correct and I stand by them. I have grouped the various martial arts into three classes (this list does not include all martial arts). For self defense, I would put something like Karate or TKD at the bottom, MT in the middle, with Krav Maga and Jeet Kune Do at the top. Even after that short one hour of JKD it was very apparent that those guys do a lot of stuff for the street that we don't even think about in MT. As a corollary, if you are elderly or not in shape, no martial art will help you. So frankly, if you are a black belt or whatever in any art but are a fat ass and gas out in thirty seconds, I will still kick your ass.

All in all it was a cool day. I learned a lot getting out of my art for a bit and it was super cool to understand that my body has learned so much through muscle memory. Like a golf swing or anything else, you have to practice and go to the gym, or you will not develop as a martial artist.

Monday Morning Blues

Sunday, December 20, 2009

Homebrew Part 3

Patience delivers.

You may view my previous documentation on home brewing for the holidays here and here.

I homebrew ten gallons each year to present my clients with a home made Christmas gift. Some may bake cookies or preserve fruit in jars as gifts. That’s not my style.

Regular commenter Snakeye asked on a previous post why I do not primary brew in a glass carboy. Snake, I use a plastic bucket for the primary fermentation because it is large enough to prevent foam-over problems and plastic is also what I initially started brewing with. But I do use a glass carboy for the secondary fermentation. A transfer for secondary fermentation allows the spent yeast to be tossed before adding an off flavor to the final results. It also helps to clear the brew from suspended particulates.

In order to be brief I did not document each and every step from boil to bottle. But the following images display the final result.

I buy boxes from Mr. Take Out Bags online. A few years back I used wooden boxes bought at Sam’s liquors in Chicago. They became unreliable and the corrugated cardboard containers are far less expensive but make a fine presentation.

All labels are designed by me, since I make my living as a graphic designer. The labels get printed at Kinko’s then I cut them out and use spray adhesive to apply them to the containers. This way I get to show clients what I do. I can also write-off the cost as a self-promotion expense. It is a lot of work.

The peanuts in the package work because it insulates the bottle from shipping mishaps and peanuts compliment the beer as an edible treat. I buy the peanuts fresh roasted from the Mellow Nut Co. on west Lake St. in Chicago. They supply the stadium vendors at pro-sports venues. Anyone can walk in and buy fresh roasted nuts and popcorn from them. Peanuts are sold at a ten-pound minimum purchase for about $1.+ per pound. They are the best tasting peanuts ever. Awesome. I always buy more just to nibble on around the house for the holidays. They are unsalted and taste far better to me.

These gifts not only are a way to thank clients they help promote myself as well. I have gotten business from others who saw the containers in someone’s office.

One client wrote me and asked if I would sell her a case. Even though she was not a beer drinker her husband went nuts for the brew. It is very hoppy and he loves a bitter, hoppy brew. I gave her a few leftover bottles and she presented them to him for a Valentine’s Day present.

A new client called me one day to set up an onsite contract project at a downtown ad agency. While I never worked for him before he got a reco from another creative director. When that potential new client asked for my contact information the CD gave him an empty bottle of my homebrew.

All images here are raw, the only retouching I did was to block out personal information.

I have spent thirty years in the advertising, marketing and sales promotion business. If I can’t promote myself I ain’t worth a shit. Buying someone a bottle of wine, sending a box of prime steaks or a gift card as a thank-you to clients is fine

But what says appreciation more than anything is something that is home made, tastes good and is more filling. A little head buzz is a nice extra bonus too.

My simple little offering sets me apart from others who do what I do. It just works.

Saturday, December 19, 2009

Texas Energy Buyout

One of the long-time major public utilities was known as TXU and was based out of Dallas, Texas. TXU was a large utility and expanded to include overseas assets; after the energy bust in the early 2000's TXU shed their overseas assets and participated in the deregulation schemes for the state of Texas.

A bit of background is that utilities are pretty much regulated on a state-by-state basis. In addition, Texas (with the exception of El Paso, which is really almost more a part of New Mexico, I used consult there) is on their own transmission grid known as ERCOT, that has its own voltage different from the rest of the country, meaning that power in Texas can't generally cross state lines. This means that you can't bring power into Texas that isn't generated in Texas and you can't sell Texas power outside of state lines. The subtle side effect is that, for power at least, Texas is like a "whole separate country" - if there is a surplus of generation in the state, rates stay low - but if they are short on generating capacity - prices will soar. Surplus or deficit power in neighboring states can't help or harm Texas.

Here is an instant tip for you - any deal done in 2007, at the height of the bubble, is generally in trouble. The 2007 mortgage "vintage" is the stinkiest year, and the same type of damage spilled over to the deal arena. Generally if you are looking at a 2007 deal, when equity values were at their highest and "easy money" for debt was readily available (meaning that you could "leverage up" higher), those are the deals with the characteristics likeliest to make them go south.

So now that we have gone through a bit of background on the unique nature of the Texas electricity market, and gone through the general background of deals that were executed in 2007, now we move on to the current status of TXU, which became "Energy Futures Holdings" when a leveraged buy out of equity owners occurred during that year for $45 billion, led by KKR, Texas Pacific Group, and Goldman Sachs (see brief wikipedia article).

Energy Futures Holdings incurred a large debt taking a utility public. Historically utilities have had substantial and steady free cash flow. Thus the plan typically is to leverage up with debt (which is cheaper than equity, because you can deduct interest on debt), cut expenses, and keep the cash flow. For a utility with large capital expenditures (investments), another obvious way to increase your cash flows is to pare back on new investments of items like power plants, transmission lines, and distribution networks.

The debt of Energy Future Holdings is trading at a substantial discount to "face" value, which is 100 cents on the dollar. For this bond issue (each one is valued differently, because they have different terms, maturities and rights, although they generally move in synch along with the overall enterprise health) the bonds were trading at 70 cents on the dollar for the 2017 bonds.

One item that is eye-popping is that this bond returns a coupon of 10.875%, almost 11% a year! The current treasury (risk free) rate today for bonds with a 7 year maturity (to be in synch with the 2017 bonds) is 2.74%, per this government bond yield table. Thus these bonds pay (10.875 - 2.74) = 8.131% HIGHER than the "risk free" rate, for a period of 7 years. Thus if risk was equivalent (which it clearly is NOT), then this bond would be trading for far above 100 cents on the dollar, maybe something like 150 (I will leave it up to Andrew from Aurora, the new guy on the blog, to figure it out if he feels like it).

So for a bond to be trading at 70 cents on the dollar with a high coupon rate basically means that investors are bracing for a serious fall. A quick look at their financials shows why (even though they are private and have no equity investors, they have debt investors with publicly traded debt so they still file SEC filings and have quarterly conference calls). EFH has huge amounts of debt coming due in 2014, and it currently doesn't appear that they are generating enough cash to pay down this debt. To be fair, when deals like this were done at the height of the "easy money" boom, you not only had models showing growing cash flows, but you also figured that you could easily re-finance and push out the maturity of debt as it comes due. In general, those days are mostly over unless you have a heavy equity component (a lot of your own money at stake) or a sterling balance sheet.

Recently EFH had a bunch of complex stuff happen with its debt that frankly I don't have time to go through in detail, but basically they are trying to push out maturities by swapping debt coming due in the near term for new debt issues coming due in the future.

The logical question is - how does this impact the Texas electricity market? The answer - I don't know. We kind of are moving into uncharted territory for the US energy market. Way back in the day an energy company going bankrupt or having very significant financial troubles was very rare - a utility in Tucson, one in El Paso Texas, and then the whole California markets had big problems. However, those utilities were at least "public" utilities, meaning that the shareholders were "mom and pop" people too who were reliant on dividends and got some sympathy with the regulators. It will be very difficult for these private equity guys to get much sympathy from Texas regulators, by contrast.

And how is this impacting capital programs? I don't know. The company would probably say "not at all" and this makes some sense because right now Texas is awash in electricity due to falling demand and the fact that excess power can't be "wheeled" out of state. There are a couple of coal plants in the queue that EFH continues to work on (lignite) but when this buyout was proposed originally the former TXU had grandiose plans to actually increase generating capacity significantly with new plants; now those plans are shelved.

It will be interesting to watch what happens in Texas if current trends of low electricity usage continue, and how the company does with its high debt low (and distressed pricing), or if electricity demand surges, whether or not they begin a big capital program to add new capacity.

Kind of uncharted ground for the energy industry, having a private buy out on this large a scale.

Cross posted at Chicago Boyz

Friday, December 18, 2009


I thought a little bit of Alpaca fun would brighten everybody's Friday a bit. I saw them a couple of months ago in Galena outside of the "Galena Log Cabin Gateway". Funny I thought they were Llamas (went packing with them once) but turns out they are Alpacas.

Cross posted at Chicago Boyz

Wednesday, December 16, 2009

Funny Article on Bears' Quarterbacks

Matt Taibbi is a writer for Rolling Stone magazine, who for some reason has decided to pen an occasional article on sports. His recent article was about the historical train wreck that has been the Bears quarterback position, a topic that Dan wrote about long ago.

"The Curse of the Bears" - Why do Chicago's quarterbacks all go bust?

The Chicago Bears quarterbacking job is the most cursed position in sports, the Bermuda Triangle of line slots. The ignominy of the Bears QB legacy stretches to the horizon... They've had guys suck after being good somewhere else (Cutler), had guys suck and then go on to be good somewhere else (Jim Harbaugh, Doug Flutie), had guys suck at the beginning of their careers (Grossman), the middle (Kramer), and the end (Chris Chandler). It's an extraordinary feat, depending on how you feel about Jim McMahon, the last great quarterback to play for the Beras was Sid Luckman, a leather-helmet-era Hall of Famer whose rookie year coincided with Hitler's annexation of Czechoslovakia.

Wow. If only it wasn't so true.

And the Bears paid full retail price for failure, giving up the 11th pick overall for the corpse of Rick Mirer and doling out $20M for much-hyped UCLA brat Cade McNown, whose crowning achievement as a Bear was getting indicted for misusing handicapped-parking placards.

I like the finale.

As NFL black holes go, the Bears QB job doesn't have much competition. Cardinals running back? Yeah, OK, but who cares? The Bears are a national institution, which makes this run of sucky quarterbacks horribly conspicuous, a huge wart on the face of sports that just keeps getting bigger with every crushing Cutler pick.

Tuesday, December 15, 2009

Purple Sash

It has been a while since I posted a photo of the coveted "pantalones caliente". So why not put one up with the purple sash that I earned last night?
Just a few weeks ago I wrote a post about testing here. To review, I really don't like the tests too much. I deal with stress and sh1t in my normal life with job, family, and all the rest and use the gym as a sort of "escape" from the every day stuff and to get a good sweat on. The last thing I want to deal with is my instructor putting me on the spot for a missed technique or asking me a curriculum question from the last block. But so it goes. I talked about it once again last night with my instructor and the book is pretty much closed on the subject; our gym tests - and so shall it be.

One good thing I found out last night is that my sparring is really improving. My fears are starting to go away and I am starting to develop a "game". When I was a beginner, my mission was to throw a single technique and get out of range. Now I am probing my opponent, looking for weaknesses and setting things up. I am becoming a much more complete fighter.

I sparred one of my rounds with a pro fighter last night and did pretty damned good, if I don't say so myself. I used to dread sparring with the higher level guys, but I cherish and welcome it now. I hate sparring with women. No offense to the women, but they are simply no match for me when we get into the clinch. I am just too strong for them. The women in the advanced levels are highly skilled and you can see that when they spar. But I am not just going to sit there and let them pot shot me from range. For them, I just eat a leg kick or something and then get into the clinch with them and they are toast.

But it is a different story with the higher level guys. When we clinch it is a war at times so that isn't the desired strategy unless you feel that you can absorb damage better and dish more out. You have to work your overall game.

I am starting to notice that I feel the blows from others less while we are sparring as well. Things that used to send me to the floor don't even phase me anymore. From this photo you can see that I took (at least) one to the snout last night - I didn't even know it happened and didn't notice the bruising until this morning. That is a good thing. Honestly I am not sure if this is damage from punches or elbows.
Remember in sparring we always try to pull our techniques so we aren't totally killing each other. But at times, sh1t happens. My legs are pretty well chopped up as usual, and I have lots of cuts and other stuff on my arms.
All the ab work I have been doing is really paying off for me though. I remember distinctly getting kneed and punched in my liver/kidneys. It hurt at the time, but I really don't feel that bad today. All in all a good night.

We have one more lesson on Wednesday, then a seminar on Saturday and that is it until January. My body will like the break since everything always ramps up in intensity right before the tests. And I have a running race on New Years Day. Yes, it never stops.

Oh yea, one more thing. I realized last night that I am almost half way to earning a black sash. Six years is how long it takes to earn it at my gym. I have been doing MT for just over 2.5 years now. What a life changing experience this has been.

I think the best part is having a new "family" - my dysfunctional gym family. They really are great people.

Lastly, as always, I need to thank my lovely and wonderful wife for allowing me the time to go to the gym twice (or more) a week. I couldn't do it without her. Although she will give me the berries tonight because of the facial bruising. As she should.

Monday, December 14, 2009

Bloomberg Article on Chicago Unit Bond Issue

Bloomberg recently wrote an excellent article about a bond issue by a Chicago public entity (not part of the city, but close), the Metropolitan Water Reclamation District of Greater Chicago. The article is called "Hedge Funds Win on Chicago Sewer Debt at Public Cost".

To summarize, the Federal Government now subsidizes local municipal bond issues through a "Build America" program, which offers a subsidy of 35% of the interest cost to issuers. This is viewed as more efficient than the tax subsidy of municipal bonds, which are tax exempt on the individuals' tax return and also often for state returns if the bonds are purchased by in-state holders.

The MWRDGC issued $600M of debt recently. Customers bought $73M of the issue and immediately sold them in the secondary market. This type of activity generally means that the bonds were mis-priced (priced too low), which the Bloomberg article references.

Per Bloomberg:
Dec. 8 (Bloomberg) -- The “fair and reasonable” price financial advisers recommended to the Metropolitan Water Reclamation District of Greater Chicago for the biggest borrowing in its history cost taxpayers $8 million in unnecessary interest and resulted in a bonanza for bankers, according to documents initially withheld from the public.

The Aug. 11 Chicago sewer bond sale, arranged without competitive bidding like 84 percent of the $354.3 billion of municipal debt issued this year, “was a very lucrative deal for underwriters and investors and a very poor deal for the taxpayers of the district,” Daniel Kaplan, president of Kaplan Financial Consulting Inc., said in a letter read at the district’s board meeting Nov. 5.

Also interesting - later in the article - they mention that in other deals it is rare for hedge funds to be involved in this sort of purchase. An Iowa issuance mentions that they didn't have any hedge funds at all in their initial sale.

I commend Bloomberg for their research and recommend that the local papers, the Sun-Times and the Chicago Tribune, investigate the other bond sales by the City of Chicago, Cook County, and related governmental units. The analysis would probably lead to other types of insider deals and the like.


For those of you who may not know, up here in Madison we got buried in snow on Tuesday and Wednesday. It was the sixth worst snowstorm since they started keeping records in the late 1800's. Depending on where you were the amounts were from a foot to just under twenty inches of snow. Pretty much everything was closed up here on Wednesday from schools to stores to everything else.

But this winter I am taking a different tack from winters past. Rather than just moping and bitching, I am focusing on my training on bike and dreadmill with an eye on spring. In just a few months all of this nonsense will be over. I also want to learn how to cross country ski. It looks like a great workout and fun to boot. Not sure if that will happen due to time constraints but we will see. Bike and running get priority. And, of course, MT.

It got relatively warm yesterday and I decided to take my youngest sledding (spousal unit and oldest child were shopping). There is a small hill (but big enough for me) just down the street. We weren't the only ones with the idea to go sledding yesterday. It was really fun. The dog's name was Maddy. Short for Madeline I suppose.

Here is one from the sled. Not easy to hold the camera while sledding.

This little girl was having fun doing her own thing.

And, of course, you know what you get at the end - hot chocolate and a warmup by the fire with the kitty in your lap.

Monday Morning Blues

Sunday, December 13, 2009

Holiday Shopping 2009 Chicago

I recently braved the crowds which were surprisingly large for a recession on Saturday and went shopping for Christmas gifts. A few photos from my travels in downtown Chicago.

Upper left - an Agent Provocateur bag left in the trash. Someone probably purchased something for their girl and then realized that bringing the bag home is a dead giveaway. Or this is really saying "here is a gift which ostensibly is for you but is actually for me."

Upper right - I love the slogan "Enrich Your Mind" on this shelf of books at Best Buy. Let's go through the "mind enrichment" - you have:

1. A Danielle Steele book (is she still alive? She was writing trash when I worked at a bookstore in the mid 1980's... damn looked her up at wikipedia and she is only 62)
2. J.D. Robb is really Nora Roberts, another hack romance novelist
3. A Michael Jackson bio book. 'Nuff said
4. There's the book about Dexter the serial killer
5. Don't forget the biggest loser

Lower left - a cool view of the Trump Tower from almost bottom to top - it is hard to find an unobstructed view showing that much of the building in one shot

Middle right - I love the concept of a bow on a car. "Look honey, I gave us a liability!"

Lower right - a camera shot of people relaxing at Bistro 110 post holiday shopping. I like the reflections

Cross posted at Chicago Boyz

My Excellent Chicago Deep Dish Pizza Experiment Part 1

Regional food is sensational and replicating these items at home are a challenge I never turn down. Chicago is famous for a few. Italian beef I have conquered. The Chicago-Style Hot Dog is a joke. Layering on a ton of sh!t on a hot dog so you cannot even taste the meat makes no sense to me. No challenge there. The Chicago-Style deep dish pizza is one item I have yet to successfully imitate. So far.

The year was 1972. I was attending art school in Chicago. Friends I met there wanted to go out one Friday for lunch at a nearby pizza place called Gino’s East on Superior just east of Michigan Ave. Being dirt poor at the time and usually packing a lunch I thought what the heck, I would have to sacrifice drinking beer that night.

Little did I know this was going to be a pizza like none I ever had. The fvcking cheese was on the bottom! It was built upside down but tasted fabulous. And very filling too.

All my adult life I have been on a quest to make restaurant quality pizza at home. Steve H. published his exploits in home pizza perfection a few years ago and it is so perfect I have been making it ever since. The secret was using the pizza stone. But his is a New York-style thin crust (which is still my favorite pizza).

I am a huge advocate of Cook’s Illustrated magazine, the finest cooking publication on this planet. Their television program airs on PBS out of Chicago on Saturdays and if I am home I will make time to watch it. You can learn more about food in a few half-hour “America’s Test Kitchen” programs than you will watching The Food Network for ten years.

The latest Cook’s Illustrated came in the mail last Tuesday with a recipe for making a Chicago deep dish pizza. This is one recipe I could not pass up because making and baking a quality deep dish is very difficult. All my previous results were usually sub par compared to Gino's East.

I won’t publish the recipe here (it’s too long) but if you shoot me an email I will gladly send it to you.

My Excellent Chicago Deep Dish Pizza Experiment Part 2 is directly below

My Excellent Chicago Deep Dish Pizza Experiment Part 2

All my previous attempts at deep dish were edible. All involved a cornmeal crust, cheese on the bottom, then sausage and a tomato concoction with grated parmesan cheese dusted on the top. The best recipe came from the ChiTrib food section. While it was ok there was no comparison to Gino’s East or Uno’s (I did not include Lou Malnatti’s or Giordanos because they are not worth including, IMHO).

Yesterday afternoon after re-reading the article and accompanying recipe I knew this would be a two to three hour prep so I started early. The magic (and work) is in the crust, as all pizza is. To me, cooking is easy and baking is not. Pizza is a combo of both.

It’s necessary to have a good stand mixer. We have had this Kitchen Aid top of the line mixer for more than 25 years. We have used it to make everything from bread to cookies to grinding meat for home made sausage and chili. It is worth every penny, if you like to cook.

The Cook’s secret to making the crust is to roll out the flour/cornmeal dough, spread softened butter on top and then roll it up. This is a pastry maker’s trick. It leaves layers of hard butter in the dough making a flaky crust. Sounds good to me. Then the dough is divided in half and set to rise in a bowl in the refrigerator so the butter never melts.

Their sauce concoction was superior to most. I could put that into a bowl and eat it by itself.

We cooked the sausage before adding it to the pizza. I think removing as much fat and grease is good. Chicago deep dish places do not, they let the sausage cook on the pizza in the oven.

The Cook’s recipe did not recommend using a stone and they also recommended cooking in an oven at 425 degrees. More on that later.

What I like about cooking at home over restaurants is that cooking is an activity I enjoy and it can involve others in a social activity. I think of it as entertainment. It costs less in most cases. You shed the guilt of tipping for poor service and less than expected quality. You can enjoy a cocktail and some wine and not worry about driving home and getting pinched. But above all it is most rewarding when the results are spectacular, and that happens most of the time for me.

This deep-dish turned out great. I may tweak a few things next time. The crust could have been crispier, maybe I will try using the stone. 1lb. of cheese was not enough divided between two 13” pies. Next time I will use more mozz cheese and add in some provolone.

All in all the results were what I have come to expect from Cook’s Illustrated. At LITGM we do not shill for anyone, as Dan likes to say. But shilling for Cook’s is not bad, hell, the magazine has no ads. It’s more like Consumer Reports and they don’t shill for anyone either.

UPDATE: I offered to send a copy of the recipe to readers. A few have requested it. Sorry, but common sense (and the law) prevailed. It would be a copyright infringement for me to send scanned pages from the publication. At LITGM we obey the law.

If you want the full recipe you may obtain it here.

They offer a free 14 day trial so it should not cost anything.

Friday, December 11, 2009

Who Dat?

Fat, drunk and stupid is no way to go through life, son.

Imagine what could happen in Louisiana if the Saints win the Super Bowl.

Chilling Self Defense 911 Call

Over at Xavier's place there is an interesting post about self defense. Below is a breathtaking 911 call from what sounds like an older woman who had to shoot an intruder. I am simply amazed at how calm the woman is through the whole thing. As a disclaimer, I am taking for granted that this call has not been edited and is real.

I do not feel bad for the intruder. He made the choice. I do feel bad for the woman. She is immediately sorrowful that she had to take a life. But I hope she gets some good counseling. The choice was made for her, she did not make the choice.

Her frame of mind is excellent throughout the call. She states that she will not lock herself in a room, that she has a big shotgun. She says repeatedly that she hopes that this guy will not break in because she will kill him. And she did. The DA did not press charges on the woman.

I can only hope that I act so calmly if presented with this type of situation.

Thursday, December 10, 2009

Insane Bike Rider

As I was coming home tonight I saw this insane bike rider coming down the street. It is about 15 below with the wind chill and it is likely much worse with the wind in your face as you pedal, I am certain.

Anyone who rides their bicycle in this type of weather ought to be committed or commended, I can't tell which.

Message Received from the Chicago Bears

Just got this in my email:

Dear Mr. Dan from Madison: Thank you for being a Chicago Bears Season Ticket Holder. Because of your Season Ticket Holder status, we would like to notify you about a small number of tickets that have just become available for our game against the Green Bay Packers this Sunday, December 13, at Noon. Tickets can be purchased right now at You can also call Ticketmaster at 800-745-3000. Please act quickly as these tickets are sure to go fast. Thank you for your support of the Chicago Bears and we look forward to seeing you on Sunday. Go Bears! Chicago Bears Ticket Office.

Yikes, the Bears can't sell out the Packer game? Times are indeed tough.

Wednesday, December 09, 2009

Welcome Andrew from Aurora!

We have a new member on the blog, our friend Andrew from Aurora. You can see the post he put up below on diving on a submarine, which is awesome. He is also famous (around here, at least) for the 9mm vs. 45 cal post which has always been a big traffic generator for the site (not that we care too much, we don't have ads).

Since we aren't here to drive traffic each of us posts when we like. All of us have other jobs and lives and even web sites so we don't try to post here on a regular basis, just when we have something that we think might be interesting, and not politics, because that brings out the worst in the web world.

Andrew has a million cool hobbies that will be fine grist for this site, including the ability to build stuff, is a great shot and a firearms expert, a diver, and knows a heck of a lot about business and other things to boot.

Dan and I are so happy that Gerry joined the blog. His cooking posts are fantastic, although frankly I am so inept in the kitchen that I can't even start with them. Also there has been so much more and it has made the blog a richer place. Also note the cool photos on the mast head that is his doing and he is a great photographer (insert joke here about Carl being the worst photographer on the site, which will be even more true when Andrew joins).

So Welcome!

Tuesday, December 08, 2009

Diving a German U-Boat

U-352 88mm Bow Gun Mount & Conning Tower
My buddy “Sarge” introduced me to SCUBA diving a couple of years ago as a “best man” gift at his wedding. What started out casually as just another fun vacation activity to enjoy some free morning at a tropical resort has grown for both of us into a true passion for the sport.

While the Midwest might not seem like a diver’s paradise, it’s actually an excellent training ground to get well schooled in solid dive practices. We like to joke that if you can navigate 100-yards with 5-feet of visibility 60-feet down on the bottom of a silty inland lake in 50-degree temps you’ll be bulletproof in the gin-clear bathtub of an 80-degree Caribbean reef.

As we’ve pursued our love for diving, we’ve discovered a host of local underwater attractions (beyond the ubiquitous submerged rock quarry) along with an inspiration for more advanced training. Sarge took a dry-suit course to extend his Minnesota diving season into a year-round affair. He now dives under 2-feet of ice in February and makes Columbus Day runs to explore shipwrecks in the frigid waters of Lake Superior. We’ve both gotten certified in enriched gas technology to extend our bottom times at deeper depths and I’ve used my skills to dive the myriad of wrecks in Lake Michigan where 45-degree fresh water preserves even 150-year old wooden schooners in surprisingly good condition.

This summer we decided to step it up and put our hard-earned training to use in the Major Leagues. The Outer Banks of North Carolina is known as the “graveyard of the Atlantic” for the stunning array of ships sunk over the centuries by winter storms, tricky navigational hazards, and the German Kriegsmarine which operated with near impunity, torpedoing thousands of tons of commercial shipping during the early days of WWII. With the lure of testing our mettle against all that wrecked metal we packed our gear for Hatteras.

U-352 Pressure Hull Battle DamageOur main objective was both predator and prey during Hitler’s Operation Paukenschlag (“Drumbeat”) during the winter and spring of 1942 when German u-boats slaughtered over 600 ships off the largely unprotected sea lanes right up against the US east coast. The German Submarine, U-352 met its fate during a chance encounter with the tiny Coast Guard Cutter Icarus. Originally designed to fight small-time rum-runners during prohibition the up-gunned Icrarus executed several near-perfect depth-charge runs against the hapless Lt. Hellmut Rathke and his German crew of 49. When the concussions subsided, Lt. Jester and his Argos-class cutter had chalked up a rare U-Boat kill for the US, sending the technologically superior Type VIIC U-Boat to her grave 110 feet deep on the sandy bottom off of Cape Lookout where she lies to this day.
U-352 Conning Tower & Aft Hatch

Almost 70-years later, the sub is still remarkably intact with many identifiable features including the conning tower, dive planes, torpedo tubes, various hatches, and the mount for the 88mm deck gun.U-352 Torpedo Tube

Even breathing Nitrox, bottom times are limited to around 25 minutes at that depth and visibility was around 40-feet. Currents were ripping at about 2-knots or so from stern to bow making the dive a challenging experience but well worth the trip.

A few weeks later, Sarge and I visited the U-505 exhibit at Chicago’s Museum of Science & Industry with our underwater pictures in-hand. Although the 505 is a slightly larger Type IX boat, the similarities are striking and the visit gave us a chance to put theU-352 Prop Shaft, Rudder & Aft Dive Planes features we saw submerged into the context of a fully-restored war machine – and this time with an unlimited air supply. I even researched and built a scale model to match the U-352 in color, features, and insignia which has allowed me to envision what the boat was like when she was in her operational prime (see comparison photo).

Sarge and I now both feel like we’ve touched history in a small way and the experience has inspired both of us to learn all we can about wartime U-Boat operations and the men who fought them.

Saturday, December 05, 2009

Another Blow Against Nuclear Power in the US - History

For the last couple of years there has been talk of a "renaissance" in nuclear power in the United States. The government has issued some loan guarantees to various parties and the greens are starting to come around to nuclear power because of greenhouse emissions. While I am a supporter of nuclear power and of investing in generating capacity in general, from the moment that this false hope started I have been steadfast in maintaining that virtually no new nuclear plants will be built in the US in the near term, meaning the next 5 or so years.

One other block against any sort of nuclear power investment is HISTORY. This article in today's Wall Street Journal titled "Costs Cloud Texas Nuclear Plan" discusses the South Texas Project, a nuclear site in Texas that is owned today by municipal utilities in Austin and San Antonio Texas and NRG, a public company that owns various generating assets around the USA.

The South Texas Project (STP) has 2 nuclear units today. NRG applied for Federal financing to build 2 additional nuclear units at the site, as part of this "renaissance" of nuclear power.

The original STP project was subject to massive cost overruns. Per the article:
"skittishness about the cost of nuclear energy is understandable. The first two units at STP were supposed to cost less than $1 billion but ended up costing more than $5 billion. With that memory seared into its memory, San Antonio officials have been sensitive to anything suggesting that they could, again, get blindsided by escalating costs"

Note that the costs escalated by a FACTOR OF FIVE from the original estimate - $4B cost overrun in 1982 dollars translates into over $8B based on this "inflation calculator" I found on the web.

Now the initial estimates, which I said were ridiculously low in previous posts, are going up BEFORE THEY EVEN BREAK GROUND. This is a new form of escalation - they haven't even dug in a shovel and already they are giving up on their original estimates, in a big way.
"Cost estimates for two-reactor project ballooned to $12.1 billion last summer from a preliminary estimates of $8.6 billion in 2007, catching them off guard. Utility documents say that the (San Antonio) Board was working with a figure of $10 billion"

It is important to realize that government or municipal owned utilities like San Antonio, Austin, the State of Tennessee (TVA), and many others were builders of a significant percentage of all the original nuclear fleet. As these cash-strapped entities balk at throwing money into the incredibly risky nuclear power business, one of the last cards in the deck for new nuclear plants goes away.

NRG, a public company that is has been a takeover target by Exelon as recently as the summer of 2009, still plans to go forward with this project on their own if necessary.
"NRG hopes to win permission to begin construction in 2012, and to put units in service in 2016 and 2017. "The project will go forward regardless of CPS' decision"... adding that he did not believe the matter would affect NRG's ability to garner important Federal loan guarantees for the project.

Really... I have better odds of being president in 2017 than this project has of being completed by that date, especially with the fact that NRG has been a habitual takeover candidate and most of the likely acquirers are financially savvy enough not to throw 100% of their capital down a black hole of nuclear construction beset by NIMBY's and continually-shifting government regulations. In a sick way maybe NRG is plowing forward with this project alone just to be so toxic that no one would think of acquiring them, because then they'd have to face the ballooning costs of this venture.

Once again this is a sad post because I am a big fan of nuclear energy but it is important to be realistic in what can be done in the current legal and financial climate. In addition, the fact that the media were cheerleaders in this impossible fantasy just shows that they have no idea what they are talking about. The WSJ was a bit more sanguine than the rest, but frankly they should put up an editorial piece bemoaning the sad state of power generation capacity in the US and our lack of plans to set it right.

Cross posted at Chicago Boyz

Friday, December 04, 2009

Take The Test


I am in the process of designing my Christmas gift homebrew bottle and box label.

While researching beer labels I found this

Give it a shot...and a beer.

Thursday, December 03, 2009

Things I Like About Chicago.


In the mid seventies and early eighties buddies from work and I hung out at the Billy Goat Tavern in Chicago during lunch hours. A pitcher or warm flat Old Style beer on tap went for about $4. The double chizborgers were about $2.50 back then.

Old man Sianis never did believe in cold beer storage since the high utility bills cut into his profit (the bartender told me). And why buy fresh bread when week-old stale buns are acceptable to the clientele? Their burgers were always sub-par even at the old prices but the ambiance was second to none back then.

The original Billy Goat occupies a hidden place on lower Michigan Avenue northwest of the river and it is still in business but the tab will be much higher if you ate there today.

This video captures what I remember. It was filmed at one of the newer Goat establishments located on west Washington St. between Franklin and Wacker.

Some things will never change. I hope.

Chicago Bears Marketing

Cross posted at FRT.

Tuesday, December 01, 2009

Unsung Technology Advances

One truism on Technology is that the initial media splash and the early adopters skew trends by making them seem to have more impact than they actually do. It is often the slower, longer "tail" of a trend that causes the most significant change, even if by then the media has passed the story by because it is no longer "hot".

Two items happened last week that show a profound technology advancement that is by now ubiquitous and thus rarely commented on by the media. These two items are 1) the vast scope of online gaming and 2) Craigslist and its impact on retail.

While watching the Bears get killed on Sunday during half time, my nephew put on Call of Duty - Modern Warfare 2 which just got released in November, 2009 for Xbox. Already, there were masses of individuals online playing the game - there were over 800,000 users online AT THAT MOMENT. He joined a game, which was simple, and the intelligence split up the team members based on their levels so that the two teams were balanced. It is just amazing how easy it is to join these games and play infinitely, against other human opponents - this used to be hard to do (Dan and I played online a long time ago) and now it is not only a snap but there are hundreds of thousands of opponents ready to play a huge variety of missions at any time day or night. Also, Xbox, which was viewed as behind Wii and PS3, is now a leader in online gaming which is a huge differentiator against the other consoles, while this wasn't viewed as a critical factor at the time the consoles all emerged.

To say that online gaming against human opponents is addicting is a huge understatement - playing against intelligent and skilled gamers is a big challenge as well as a way to gain status in the online community, because everyone can see your "kills" and ranking. You have the ability to restrict players to your friends or open it up to the whole world. There also is an online chat element, with men (and women) of all nations shouting into their headsets. As a social phenomenon, this will now have significant consequences, in terms of driving people away from other forms of interaction towards online gaming.

A parallel track is the fact that craigslist is now a significant challenge to retailers across the spectrum. This entire dining room set and China cabinet was found online through craigslist for a bit over $1000, which is amazing because this set would be higher than $5000 at retail. My relatives bought this, and many other close friends and acquaintances are using craigslist to furnish their apartments and houses, even for high-end furnishings. If you know what you are looking for and you have time and patience, you can find quality furniture without going the retail route. Another advantage is that you see what you get, while often purchasing furniture means waiting for weeks to receive what you ordered.

Many people are downsizing and moving out of foreclosed homes and this is a way to find about anything right now. There are now many individuals who are getting used to purchasing this way and they are to some extent going to be permanent exiles from the pool of potential consumers for retailers. Ultimately this will have a profound impact on this market, since a viable secondary market didn't exist prior to craigslist that was available to the masses. Try it yourself - if you have patience and are willing to bid and check it out yourself and find a mover or rent a truck pretty much anything you are looking for is out there, somewhere, on craigslist.

Cross posted at Chicago Boyz